American Express

ABS Investor Presentation

February 2011

Agenda
AXP Overview and Performance
Capital and Liquidity
ABS Overview

AXP Franchise

American Express is a global service company that provides customers with access to
products, insights and experiences that enrich lives and build business success.

Our principal products are charge and credit cards, focusing on the premium market
sector. We are the world's largest issuer as measured by purchase volume.

Our spend-centric model is a significant competitive advantage.

American Express is a brand recognized around the world for exceptional service and
customer care, and has been ranked highest in overall satisfaction among the largest
card issuers in the U.S. for the last 4 years, according to the J.D. Power and Associates
annual nationwide credit card satisfaction study.

Average spending per card is substantially higher for us versus our competitors.

The global diversity of our business includes:

91 million cards in force worldwide,
More than 120 card issuing or merchant acquiring arrangements with banks and
other institutions,
Over 950 American Express-branded network partner products.
3

Spend-Centric Model
The AXP spend-centric business model focuses primarily on generating revenues by
driving spending on our cards, and secondarily finance charges and fees, allowing us
to grow market share in the payments industry.
Investments
in Premium
Value

Attractive
Customer Base

Premium
Economics

High
Average
Spending
4

Company Overview
($ in millions, except
percentages)

AMERICAN EXPRESS COMPANY

2009

2010

Revenues Net of Interest Exp.

$24,523

$27,819

Income from Continuing Ops

$2,137

$4,057

Net Income

$2,130

$4,057

14%

27%

Return on Avg. Common

U.S. Card Services

2009
Revenues Net of
$12,153
Interest Exp.
Segment Income
$411
Return on Avg.
8%
Segment Capital*

Equity*

International Card
Services

Global Commercial
Services

Global Network &

Merchant Services

Corporate & Other

2010

2009

2010

2009

2010

2009

2010

2009

2010

$14,616

$4,529

$4,650

$3,983

$4,402

$3,780

$4,373

$78

($222)

$2,246

$332

$566

$350

$474

$937

$1,063

$107

($292)

35%

15%

26%

10%

13%

66%

64%

U.S. Proprietary Consumer

and Small Business Cards
and Services
U.S. Consumer Travel
Network

Intl Proprietary
Consumer and
Small Business

Corporate Card
Programs
Business-to-

Global Merchant
Services
Global Network
Cards and Services
Business Payment
Services
Intl Consumer
Solutions
Global Network
Travel Network
Business Travel
Card Partnerships

Corporate HQ
Enterprise Growth
Global Travelers
Cheque and
Pre-paid Services
Publishing

*Calculated by dividing one-year period net income attributable to common shareholders/segment income by one-year average common shareholders equity/average
segment capital, respectively.
5

Summary Financial Performance

($ in millions, except per share amounts)

Q4'10

Q4'09

% Inc/(Dec)

Total Revenues Net of Interest Expense

$7,322

$6,489

13%

$7,322

$7,041

4%

$1,062

$710

50%

Diluted EPS from Continuing Ops***

$0.88

$0.59

49%

Return on Average Common Equity

27%

14%

Average Diluted Shares Outstanding

1,194

1,184

Managed Total Revenues Net of

Interest Expense*
Income from Continuing Ops**

1%

*See Annex 2 for presentation of Q409 Total Revenues Net of Interest Expense on a GAAP Basis.**Net income, including results from discontinued operations, was
$1,062MM and $716MM in Q4'10 and Q4'09, respectively, and increased 48% versus the prior year. ***Attributable to common shareholders. Represents income from
continuing operations less earnings allocated to participating share awards and other items of $12MM and $9MM for Q4'10 and Q4'09, respectively. Diluted EPS on a net
income basis, including results from discontinued operations, was $0.88 and $0.60 in Q4'10 and Q4'09, respectively, and increased 47% versus the prior year.
6

Metric Performance
Billed Business ($ in B)**
Total Cards In Force (MM)***
Avg. Basic Cardmember
Spending (Dollars)****

Q4'10
1Q'10

Q4'09
1Q'09

$197.7

% Inc/(Dec)

FX Adj.*

$172.6

15%

14%

91.0

87.9

4%

$3,629

$3,209

13%

13%

86%

84%

Cardmember Loans ($ in B)
- GAAP Basis

$60.9

$32.8

- Managed Basis

$60.9

$61.8

(1%)

(2%)

$5.6

$5.0

12%

13%

WW Travel Sales ($ in B)

*FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars. (i.e., assumes Q4'10 foreign exchange
rates apply to Q4'09 results.) **Card billed business includes activities (including cash advances) related to proprietary cards, cards issued under network partnership agreements, and certain
insurance fees charged on proprietary cards. ***In Q310 ,cards-in-force (CIF) was reduced by $1.6MM cards due to a change in the definition of CIF for certain retail co-brand cards in GNS.
Adjusted for this change, Q410 CIF would have increased 5% versus last year. ****Computed from proprietary card activities only. Managed basis includes securitized and non-securitized loans.
For periods beginning Q110, managed basis is a GAAP presentation. In prior periods, only the non-securitized loans were reported for GAAP basis. On an FX adjusted basis, Q409 loans would
have been $33.2B on a GAAP basis and $62.2B on a managed basis.

Worldwide Billed Business

Quarter

($ in billions)

Q409

% inc/dec vs. prior year:

$80

8%

Q110

Q210

Q310

Q410

16%

16%

14%

15%

25%
20%

$70

15%

$60

10%

$50

5%

$40

0%

$30

(5%)
(10%)

$20

(15%)

$10

(20%)

$0

(25%)
Oct'08

Jan'09

Apr'09

Jul'09

Oct'09

YoY Growth - Reported

Jan'10

Apr'10

Jul'10

Oct'10 Dec10

YoY Growth - FX Adjusted*

*FX adjusted information assumes a constant exchange rate between the periods being compared for purposes of currency translation into U.S. dollars. (e.g., assumes foreign
exchange rate used for Dec10 applies to Dec09; rate used for Nov10 applies to Nov09, etc.)
8

Lending
Billed Business vs. Managed Loan Growth
% increase/(decrease) vs. prior year, Managed:

25%
20%
15%
10%
5%
0%
(5%)

(10%)
(15%)
(20%)

Proprietary Credit Card

Billed Business*
Ending Loans - Managed**

(25%)
Q4'07

Q2'08

Q4'08

Q2'09

Q4'09

Q2'10

Q4'10

*Includes lending on charge billed business. **See Annex 3 for GAAP basis for periods prior to 2010.
9

USCS Net Interest Yield

Managed Cardmember Loans
10.9%
8.9%

Q4 '08

Q1 '09

9.7%

9.8%

10.0%

Q2 '09

Q3 '09

Q4 '09

Increased Cost Improved Cost of

Impact of
of Funds due to Funds due to
Collections
spike in
Strategy
LIBOR reversion
October 1M
LIBOR rate Re-priced 55% of Lower revolve
rate
US Lending
Portfolio

10.0%

Q1'10

9.3%

9.3%

9.1%

Q2'10

Q3'10

Q4'10

Repriced additional February First full quarter

segments of US implementation impact of Feb.
lending portfolio of the CARD CARD Act
implementation
Act
Loss of revenue due

to August CARD Act

implementation

Cardmember
behavior

See Annex 4 for reconciliation of net interest income divided by average loans, a GAAP measure, and net interest yield, a non-GAAP measure.

10

Full Year 2010 Relative Performance

($ in billions)
$713

($ in billions)
$161
$141

$342

$138

$313
$61

$213

$45
$107

AXP
Growth
vs. PY

15%

Citi*
(5%)

$93

JPM** BofA*** Cap OneDiscover

6%

3%

$61

5%

6%

Mgd.
Growth
vs. PY

Citi*
(10%)

BofA*** JPM** Cap One AXP Discover

(12%)

(16%)

(10%)

(2%)

(5%)

*Includes Citi-Branded Cards and Citi Holdings Retail Partners North America Cards. **Includes the impact of the Washington Mutual acquisition. Reported billings shown
above reflects sales volume, which excludes balance transfers. ***Credit Card, includes US consumer and foreign credit card. Global Card. Fiscal year ends November 30.
Billed business is credit card sales volume; disclosed total credit card volume was $99B for full year 2010 ended 11/30/10 and increased 3%. On a GAAP basis, loans increased
86%, which reflects the consolidation of off-balance sheet assets.
11

USCS Charge Card

Net Write-off and 30 Days Past Due Rates
Net Write-off Rate

1.9%
1.7%

1.6%

30 Days Past Due Rate

1.8%

1.6%

1.9%
1.7%
1.5%

1.4%

Q4'09

Q1'10

Q2'10

Q3'10

Q4'10

Q4'09

Q1'10

Q2'10

1.5%

Q3'10

Q4'10
12

AXP Lending Managed Net Write-off

Rates versus Competitors
11.8%

8.8%

9.3%

9.0%

11.9%
10.3%
9.6%
7.9%

7.3%

12.2%

7.0%

10.0%
9.3%

8.2%

7.8%

7.2%

4.3%

Q4'09

Q4'10

AXP *

Discover**

JPMorgan***

Cap One

Bank of
America

Citi

* See Annex 5 for GAAP basis for AXP for period prior to 2010. **Fiscal year ends November 30. US Card. *** Includes the impact of the Washington Mutual
acquisition. Global Card. Credit Card, includes US consumer and foreign credit card. Citi-Branded Cards.
13

AXP Lending Managed 30 Days Past Due

Rates versus Competitors
7.2%
6.3%

5.9%
5.6%
5.2%

5.6%

4.1%

4.1%

4.3%

4.2%

3.6%

2.1%

Q4'09

Q4'10

AXP*

Discover**

JPMorgan***

Cap One

Bank of
America

Citi

* See Annex 5 for GAAP basis for AXP for period prior to 2010. **Fiscal year ends November 30. US Card. *** Includes the impact of the Washington Mutual
acquisition. Global Card. Credit Card, includes US consumer and foreign credit card. Citi-Branded Cards.
14

USCS Managed Lending

Roll Rates and Bankruptcy Filings
Current to 30 Days Past Due

Number of Bankruptcy Filings

USCS Customers, x000

1.8%

73

70 71 71
65
53

69
63

57

0.6%
Jan'09

Jul'09

Jan'10

Jul'10

Dec10

30 Days Past Due to Write-off

50%

20%
Jan'09

Jul'09

Jan'10

Jul'10

Dec10

Q4'08

Q2'09

Q4'09

Q2'10

Q4'10
15

Peer Comparison
Trust FICO Distributions*
FICO <660 (Sub-prime)**

FICO >720 (Super-prime)

76%

22%

24%

26%

29%

59% 57%
47% 47%

18%

43% 41%

14%
7%

AXP
Charge
Trust

AXP JP Morgan Bank of Discover

Lending
America
Trust

Citi

Cap One

AXP JP Morgan AXP

Discover Bank of Cap One
Charge
Lending
America
Trust
Trust

Citi

*Trust data as of December 2009 for Capital One (COMET), June 2010 for AXP Charge Trust (AEIT), August 2010 for JP Morgan (CHAIT), September 2010 for AXP Lending Trust
(AMXCA) and Citi (CCCIT), October 2010 for Bank of America (BACCT), and December 2010 for Discover (DCENT). **Includes receivables associated with accounts without FICO
scores. Data on AEIT excludes the Commercial charge card accounts, a substantial portion of which do not have associated FICO scores. For AMXCA, FICO > 720 (Superprime) category includes 2/3s of the A/R within the 700 759 category.
16

Agenda
AXP Overview and Performance
Capital and Liquidity
ABS Overview

17

Capital Management

(Regulatory Ratios,
Debt Investor Expectations,
Acquisition Capacity)

(Organic growth and acquisition,

dividends, repurchases,
and capital-raising)

18

Capital Ratios
(Preliminary)

Q410

Q409
ProForma*

11.1%

8.6%

9.3%

7.0%

Tier 1 Risk-Based Capital

11.1%

8.6%

Total Risk-Based Capital

13.1%

10.8%

Tangible Common Equity to RiskWeighted Assets (TCE/RWA)**

10.7%

8.4%

Tier 1 Common Risk-Based

Tier 1 Leverage

Note: These ratios represent a preliminary estimate as of the date of these earnings slides and may be revised in the Companys 2010 Form 10K. *Pro Forma for SFAS
166/167 assumes the recognition of reserves and other adjustments related to the securitized cardmember loans as of 12/31/09, which would result in TCE, Tier 1
Common Equity, Tier 1 Capital and RWA decreasing by $1.8B, $1.6B, $1.6B and $1.8B, respectively, and Total Average Assets increasing by $23.7B. **TCE equals
common shareholders' equity of $16.2B, less goodwill and intangibles of $3.6B for Q4'10. RWA is $118.3B for Q4'10.
19

Q4'10 Liquidity Snapshot

($ in billions)

Funding Maturities

Resources
$20

Q111

Operating Cash

(6)

Q2'11

CP and Short-Term
Deposits Outstanding

(1)

Q3'11

Q411

Cash*

Readily Marketable
Securities

Excess Cash & Securities $20

Twelve Month
Maturities

$20**

*Includes $16.7B classified as Cash and Cash Equivalents and $3.6B classified as Other Assets on the Companys consolidated balance sheet. The latter is held against
certain forthcoming asset-backed securitization maturities. **Includes maturities of long term unsecured debt of $8.9B, asset-backed securitization liabilities of $5.3B and
long-term certificates of deposit of $5.6B.
20

US Retail Deposit Programs

($ in billions)

Third Party
CDs

Third Party
Sweep

Total
Deposits

$2.2
(0.1)

$14.8

$8.6

$25.6
(6.5)

6.6

3.0

0.3

9.9

$8.7

$11.4

$8.9

$29.0

Direct *
December 31, 2009 Balance
2010 Maturities
Amount Raised During 2010
December 31, 2010 Balance
Retail CDs Issued in Q410
Weighted Avg.,
Original Maturity
Average Rate at Issuance

17 Months
1.2%

(6.4)

Retail CD Portfolio: 12/31/10

Weighted Avg.,
Remaining Maturity
Average Rate at Issuance

19 Months
2.5%

* Direct primarily includes the Personal Savings Program, which consists of $7.5B from high yield savings accounts and $1.0B from retail CDs. Retail CDs included both brokered
and direct CDs.
21

Outstanding Funding Composition

$ in Billions

$111.1
17.8

$112.1

9.0
15.5

15.4
25.7

$106.0
2.3

$99.5
3.4

26.3
29.7

32.5

Short-term Debt*
30.0
23.3

Deposits**
Card ABS***

52.2

55.1

Dec-31-07

Dec-31-08

Unsecured Term
47.4

Dec-31-09

43.1

Dec-31-10

(Preliminary)

*Short-term Debt includes Commercial Paper. ** Deposits include short-term CDs. ***On January 1, 2010, the Company consolidated its off-balance sheet ABS funding
onto the balance sheet in compliance with new GAAP governing transfer of financial assets (formally known as SFAS 166/167). In prior periods, off-balance sheet ABS
funding was $22.6 billion, $27.5 billion, and $25.0 billion at 12/31/07, 12/31/08, and 12/31/09, respectively. All ABS debt is presented net of securities that have been
retained by the Company.
22

Illustrative Future Mix of Funding

12%
10%

29%

5%

4%

< 5%

22%

29%

20-50%

28%

Short-term Debt & CD's**

23%
20-40%

Deposits***
Card ABS

Unsecured Term
49%

45%

43%
10-35%

Dec-31-08

Dec-31-09

Dec-31-10

(Preliminary)

Prospective*

*Not a forecast. For illustrative purposes only to show various possible funding mixes. ** Includes short-term debt (including CP) and short-term CDs. *** Deposits exclude
short-term CDs. Card ABS excludes retained interests and reflects on and off-balance sheet debt for 2008 and 2009.
23

Term Maturity Profile Debt and LT CDs

Dec-31-10
(Preliminary)

$19.9
5.6
5.3

$ in Billions

$18.2
2.9
6.8

$13.1
2.3
2.9

5.2
9.0

Dec-31-09

8.5

7.9

2011

2012

2013

$20.2

$19.1

2.6
5.0
10.2

5.3

7.4

8.8

2010*

2011

$11.9
0.4
1.2

$11.1
1.0

4.9
2014

$4.5
0.1
1.9
2.5
2015

10.3

Long term CDs**

Card ABS
Unsecured

Thereafter

$16.5
$14.4
0.4
3.1

2.1
6.8

$11.5
1.7
1.9

7.6

7.9

2012*

2013

$8.5
1.0
2.7

10.9

Long term CDs**

Card ABS
Unsecured

4.8
2014

Thereafter

Numbers are presented on a GAAP basis except as follows: *2010 and 2012 Unsecured Term Debt excludes $3.4 billion and $1.6 billion, respectively, of on-balance sheet
Charge ABS debt at 31 Dec 09, which is included in Card ABS. On January 1, 2010, the Company consolidated its off-balance sheet ABS funding onto the balance sheet in
compliance with new GAAP governing the transfer of financial assets (formally known as SFAS 166/167), and all Card ABS is now on-balance sheet. Both on and off-balance
sheet securitizations are presented net of securities that have been retained by the company. **Long Term CDs include US$ CDs only.
24

Agenda
AXP Overview and Performance
Capital and Liquidity
ABS Overview

25

American Express
Primary Issuance Structure
American Express
Company (AXP)
Total Assets1:
$146B
Credit Ratings3: A3/BBB+/A+/A(High)
Regulated By:
SEC & FRB

American Express
American Express
Issuance Trust (AEIT)

Travel Related Services (TRS)

Total Assets1:
$143B
Credit Ratings3: A2/BBB+/A+/A(High)
Regulated By:
FRB & Various State
Regulators

American Express

American Express

American Express

Credit Corporation (Credco)

Centurion Bank (AECB)

Bank, Federal Savings Bank (AEFSB)

Total Assets1:
$32B
Credit Ratings3: A2/BBB+/A+/A(High)
Regulated By:
SEC

Total Assets1,2:
$30B
Credit Ratings3: A2/BBB+/A+/A(High)
Regulated By:
FDIC & State of Utah

Total Assets1,2: $34B

Credit Ratings3: A2/BBB+/A+/A(High)
Regulated By:
OTS

American Express
Credit Account Master Trust (AMXCA)
1. Total assets as of September 30, 2010.
2. Excludes off-balance sheet loans of $13.9 billion and $9.1 billion for AECB and AEFSB, respectively. These assets are included in the GAAP assets at TRS, following the adoption of new GAAP
governing the transfer of financial assets effective 1/1/10.
3. Credit Ratings indicated are from Moodys/S&P/Fitch/DBRS. Credit Outlook: Moodys revised its outlook for subsidiaries of AXP from stable to negative in November 2010 while keeping AXP
unchanged at negative; S&P and DBRS stable; Fitch revised its outlook from negative to stable in April 2010.
26

American Express ABS Trusts

American Express
Credit Account Master Trust
(AMXCA)

American Express
Issuance Trust (AEIT)

Trust Established

1996

2005

Eligible loans and receivables

All US Consumer and Small Business

cardmember loans

All US Consumer, Small Business and

Corporate cardmember receivables

Assets currently in trust

Consumer loans

Consumer, Small Business and Corporate

cardmember receivables

Trust Size: - Principal AR (1)

Investor Interest (1)
Seller Interest (1)

$34.1 billion
$21.9 billion
$12.2 billion

$7.9 billion
$4.3 billion
$3.6 billion

Accounting Treatment

Beginning 1/1/2010, on a consolidated

basis securitized loans accounted for onbalance sheet with no gain on sale

Securitized receivables accounted for onbalance sheet with no gain on sale

Minimum Sellers Interest

7% of outstanding debt

15% of trust principal

Credit Enhancement
based on most recent
floating rate issuance

17.5%
Class B - 6.0%
Class C - 6.5%
Class D - 5%

7%
Class B - 3%
Class C - 4%

1) Source: 10-D filings dated January 18, 2011.

27

Issuance Trust
Performance Trend
Days Delinquencies
$120 MM

Past Due vs. Default Rate

5.0%

$100 MM
4.0%
$80 MM
3.0%

$60 MM
$40 MM

2.0%

$20 MM

1.0%

$ MM
12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

0.0%
12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

31-60

61-90

90+

Past Due Rate (Calculated)

Monthly Payment Rate

Annualized Default Rate, Net

Trust Portfolio Yield

35%

120%

30%

100%

25%

80%

20%

60%
15%

40%

10%

20%

5%

0%

0%
12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

Source: AEIT 10D Filings.

28

Credit Account Master Trust

Performance Trend
Days Delinquencies

Past Due Rate vs. Default Rate

$1200 MM

12%

$1000 MM

10%

$800 MM

8%

$600 MM

6%

$400 MM

4%

$200 MM

2%

$ MM

0%
12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10
31-60

61-90

12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

90+

Past Due Rate (Calculated)

Monthly Payment Rate

Annualized Default Rate, Net

Trust Portfolio Yield

30%
18%
25%

15%

20%

12%

15%

9%

10%

6%

5%

3%

0%

0%
12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

12/09 1/10 2/10 3/10 4/10 5/10 6/10 7/10 8/10 9/10 10/10 11/10 12/10

Source: AMXCA 10D Filings.

29

Annex 1
Trust Structures
Lending

Charge
AEFSB

AECB
(Originator)

Receivables

Cash

(Originator)
Receivables

Cash

RFC III

RFC IV

(Transferor)

(Transferor)

Receivables

Cash /
Sellers Int

Receivables

Cash /
Sellers Int

A. E Credit Account Master Trust

Certificates

Cash

Classes A & B
Investors

Collateral
Interest

Cash

A. E. Secured
Note Trust
Notes

Cash

Classes C & D
Investors

AECB

AEFSB

(Originator)
Receivables

(Originator)

Cash

Receivables

Cash

TRS
(Originator)

Receivables

Cash

RFC V
(Transferor)
Receivables

Cash /
Sellers Int

A. E. Issuance Trust
Notes

Cash

Investors
(All Classes)
31

Annex 2

($ in millions)
GAAP Total Revenues Net of Interest Expense
Securitization Adjustments:
Discount revenue, net card fees and other
Interest income
Securitization income, net
Interest expense
Managed Total Revenues Net of Interest Expense

Q4'10
$7,322
NA
NA
NA
NA
$7,322

Q4'09
$6,489

%Inc/(Dec)
13%

71
726
(190)
(55)
$7,041

4%

32

Annex 3

Worldwide Cardmember Lending

($ in billions, except percentages)

Q4'07 Q1'08 Q2'08

Q3'08

Q4'08

Q1'09

Q2'09

Q3'09

Q4'09

Total Worldwide Ending Loans

GAAP
$ 54.4 $ 49.4 $ 49.6 $ 45.7 $ 42.2 $ 36.7 $ 32.5
Growth vs PY
26% 17%
3%
(9%)
(22%)
(26%) (34%)

$31.5 $32.8
(31%) (22%)

Managed
Growth vs PY

$60.7 $61.8
(20%) (14%)

$ 77.1 $ 75.1 $ 76.5 $ 75.5 $ 72.0 $ 65.0 $ 62.9

22% 19%
12%
5%
(7%)
(13%) (18%)

33

Annex 4
($ in millions, except percentages)
USCS - Calculation based on 2010 and 2009 GAAP information (B):
Net interest income
Average loans (billions)
Adjusted net interest income (C)
Adjusted average loans (billions) (D)
Net interest income divided by average loans (E)
Net interest yield on cardmember loans (F)
USCS - Calculation based on 2010 and 2009 managed information (G):
Net interest income (H)
Average loans (billions)
Adjusted net interest income (C)
Adjusted average loans (billions) (D)
Net interest yield on cardmember loans (F)

12/31/08 3/31/09

6/30/09

Quarters Ended
9/30/09 12/31/09 3/31/10

6/30/10

9/30/10 12/31/10

$669
$33.2
$725
$33.3
8.0%
8.7%

$766
$30.2
$775
$30.3
10.3%
10.4%

$612
$26.5
$581
$26.6
9.3%
8.8%

$649
$23.4
$558
$23.5
11.0%
9.4%

$621
$22.7
$537
$22.8
10.9%
9.4%

$1,221 $1,111
$50.5 $49.1
$1,246 $1,145
$50.5 $49.2
9.8% 9.1%
10.0% 9.3%

$1,124
$49.1
$1,150
$49.2
9.1%
9.3%

$1,122
$49.8
$1,143
$49.8
8.9%
9.1%

$1,341
$63.0
$1,418
$63.1
8.9%

$1,569
$59.1
$1,592
$59.2
10.9%

$1,335
$55.1
$1,343
$55.2
9.7%

$1,305
$52.9
$1,315
$53.0
9.8%

$1,292
$51.8
$1,308
$51.9
10.0%

$1,221 $1,111
$50.5 $49.1
$1,246 $1,145
$50.5 $49.2
10.0% 9.3%

$1,124
$49.1
$1,150
$49.2
9.3%

$1,122
$49.8
$1,143
$49.8
9.1%

(A) Beginning in the first quarter of 2010, the Company changed the manner in which it allocates related interest expense and capital to its reportable operating segments to more accurately reflect the funding
and capital characteristics of the Company's segments. The change to interest allocation impacted the segments net interest yield on cardmember loans. Accordingly, the net interest yields for periods prior to the
first quarter of 2010 have been revised for this change. (B) For periods ended on or prior to December 31, 2009, the Company's cardmember loans and related debt performance information on a GAAP basis was
referred to as the owned basis presentation. The information presented on a GAAP basis for such periods includes only non-securitized cardmember loans that were included in the Companys balance sheet.
Effective January 1, 2010, the Companys securitized portfolio of cardmember loans and related debt is also consolidated on its balance sheet upon the adoption of the new GAAP. Accordingly, beginning January 1,
2010, the GAAP basis presentation includes both securitized and non-securitized cardmember loans. Refer to page 19 of the earnings financial tables for a discussion of GAAP basis information. (C) Represents net
interest income allocated to the Company's cardmember loans portfolio on a GAAP or managed basis, as applicable, in each case excluding the impact of card fees on loans and balance transfer fees attributable
to the Company's cardmember loans. (D) Represents average cardmember loans on a GAAP or managed basis, as applicable, in each case excluding the impact of deferred card fees, net of deferred direct
acquisition costs of cardmember loans. (E) This calculation includes elements of total interest income and total interest expense that are not attributable to the cardmember loan portfolio, and thus is not
representative of net interest yield on cardmember loans. The calculation includes interest income and interest expense attributable to investment securities and other interest-bearing deposits as well as to
cardmember loans,and interest expense attributable to other activities, including cardmember receivables. (F) Net interest yield on cardmember loans is a non-GAAP financial measure that represents the net
spread earned on cardmember loans. Net interest yield on cardmember loans is computed by dividing adjusted net interest income by adjusted average loans, computed on an annualized basis. The calculation of
net interest yield on cardmember loans includes interest that is deemed uncollectible. For all presentations of net interest yield on cardmember loans, reserves and net write-offs related to uncollectible interest are
recorded through provisions for losses - cardmember loans; therefore, such reserves and net write-offs are not included in the net interest yield calculation. (G) For periods ended on or prior to December 31, 2009,
information presented is based on the Companys historical non-GAAP, or managed basis presentation. Unlike the GAAP basis presentation, the information presented on a managed basis in such periods
includes both the securitized and non-securitized cardmember loans. The adoption of new GAAP on January 1, 2010 resulted in accounting for both the Company's securitized and non-securitized cardmember
loans in the consolidated financial statements. As a result, the Company's 2010 GAAP presentations and managed basis presentations prior to 2010 are generally comparable. Refer to page 19 in the earnings
financial tables for a discussion of managed basis information.(H) For periods ended on or prior to December 31, 2009, the information presented includes the adjustments to the GAAP "owned" basis presentation
for such periods attributable to securitization activity for interest income and interest expense to arrive at the non-GAAP "managed" basis information, which adjustments are set forth under the U.S. Card Services
managed basis presentation on page 22 of the earnings financial tables.

34

Annex 5

Q4'09
AXP Cardmember Lending GAAP Basis
30 Days Past Due Loans as a % of Total
Net Write-off Rate

3.6%
7.4%

AXP Cardmember Lending Managed Basis

30 Days Past Due Loans as a % of Total
Net Write-off Rate

3.6%
7.3%

35

Forward-Looking Statements
This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.
The forward-looking statements, which address the companys expected business and financial performance, among other matters, contain words such as believe, expect,
anticipate, optimistic, intend, plan, aim, will, may, should, could, would, likely, and similar expressions. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update or revise any
forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following:
changes in global economic and business conditions, including consumer and business spending, the availability and cost of credit, unemployment and political conditions, all
of which may significantly affect spending on the Card, delinquency rates, loan balances and other aspects of our business and results of operations;
changes in capital and credit market conditions, which may significantly affect the companys ability to meet its liquidity needs, access to capital and cost of capital,
including changes in interest rates; changes in market conditions affecting the valuation of our assets; or any reduction in our credit ratings or those of our subsidiaries,
which could materially increase the cost and other terms of our funding, restrict our access to the capital markets or result in contingent payments under contracts;
litigation, such as class actions or proceedings brought by governmental and regulatory agencies (including the lawsuit filed against the Company by the U.S. Department of
Justice and certain state attorneys general), that could result in (i) the imposition of behavioral remedies against the Company or the Companys voluntarily making certain
changes to its business practices, the effects of which in either case could have a material adverse impact on the Companys financial performance; (ii) the imposition of
substantial monetary damages in private actions against the Company; and/or (iii) damage to the Companys global reputation and brand;
legal and regulatory developments wherever we do business, including legislative and regulatory reforms in the United States, such as the Dodd-Frank Acts stricter
regulation of large, interconnected financial institutions, changes in requirements relating to securitization and the establishment of the Bureau of Consumer Financial
Protection, which could make fundamental changes to many of our business practices or materially affect our capital requirements, results of operations, ability to pay
dividends or repurchase our stock; or actions and potential future actions by the FDIC and credit rating agencies applicable to securitization trusts, which could impact the
companys ABS program;
changes in the substantial and increasing worldwide competition in the payments industry, including competitive pressure that may impact the prices we charge merchants
that accept our Cards and the success of marketing, promotion or rewards programs;
changes in technology or in our ability to protect our intellectual property (such as copyrights, trademarks, patents and controls on access and distribution), and invest in
and compete at the leading edge of technological developments across our businesses, including technology and intellectual property of third parties whom we rely on, all
of which could materially affect our results of operations;
data breaches and fraudulent activity, which could damage our brand, increase our costs or have regulatory implications, and changes in regulation affecting privacy and
data security under federal, state and foreign law, which could result in higher compliance and technology costs to ourselves or our vendors;
changes in our ability to attract or retain qualified personnel in the management and operation of the companys business, including any changes that may result from
increasing regulatory supervision of compensation practices;

36

Forward-Looking Statements (Cont.)

changes in the financial condition and creditworthiness of our business partners, such as bankruptcies, restructurings or consolidations, involving merchants
that represent a significant portion of our business, such as the airline industry, or our partners in Global Network Services or financial institutions that we rely
on for routine funding and liquidity, which could materially affect our financial condition or results of operations;
uncertainties associated with business acquisitions, including the ability to realize anticipated business retention, growth and cost savings or effectively
integrate the acquired business into our existing operations;
changes affecting the success of our reengineering and other cost control initiatives, which may result in the company not realizing all or a significant portion
of the benefits that we intend;
the actual amount to be spent by the Company on investments in the business, including on marketing, promotion, rewards and cardmember services and
certain other operating expenses, which will be based in part on managements assessment of competitive opportunities and the Companys performance and
the ability to control and manage operating, infrastructure, advertising and promotion expenses as business expands or changes;
the effectiveness of the companys risk management policies and procedures, including credit risk relating to consumer debt, liquidity risk in meeting business
requirements and operational risks;
changes affecting our ability to accept or maintain deposits due to market demand or regulatory constraints, such as changes in interest rates and regulatory
restrictions on our ability to obtain deposit funding or offer competitive interest rates, which could affect our liquidity position and our ability to fund our
business; and
factors beyond our control such as fire, power loss, disruptions in telecommunications, severe weather conditions, natural disasters, terrorism, hackers or
fraud, which could affect travel-related spending or disrupt our global network systems and ability to process transactions.
A further description of these uncertainties and other risks can be found in the companys Annual Report on Form 10-K for the year ended December 31, 2009,
its Quarterly Reports on Form 10-Q for the three months ended March 31, June 30, and September 30, 2010, and the companys other reports filed with the
SEC.

37